Sep 19, 2017

The rush — and risks — to regulating online political ads

Illustration: Lazaro Gamio / Axios

Lawmakers on both sides are arguing that something needs to be done in order to better track spending on digital political ads in light of recent revelations that Russian groups purchased Facebook ads during the 2016 election. Their efforts are being reinforced by the Federal Election Commission, which unanimously decided to re-open the written comment period on what sort of disclaimers internet advertising should have. It's the first time the FEC has taken action on this issue in over ten years.

Why it matters: Axios spoke with nearly a dozen political ad buyers, most of whom agree that something needs to be done, but many of whom worry that lawmakers and regulators are rushing to fix a complicated, 21st Century problem with 20th Century tactics.

  • "No government regulator, and very few members of the media, understand how these mediums are being leveraged by campaigns," says Zac Moffatt, CEO of Targeted Victory, the advertising agency that managed the Romney campaign in 2012 and the Cruz campaign in 2016. "It seems like we're taking a knee jerk reaction that folks will feel better about in the short run and be totally inadequate for the complexities of the formats and targeting capabilities."
  • "The problem with the FEC and potential regulation talk from members of Congress is that they aren't going far enough and it seems like they're taking a TV filter and applying it to ad spends on digital," says Chris Nolan, a veteran Democratic political ad executive and CEO of Spot-On agency, which places political ads for candidates across the country.
  • "There's a wide disparity between digital FEC disclosures and traditional media. The digital side is nearly impossible to enforce, which is concerning," says Jordan Leiberman, Politics & Public Affairs Lead of Audience Partners, which manages dozens of political ad campaigns at the local and national levels.

Executives Axios spoke with say the industry needs to step up in order to ensure transparency, with some suggesting that publishers shouldn't be allow to accept digital programmatic (automated) ads — the types of ads big tech platforms almost exclusively sell. Some of the biggest news publishers, like The Washington Post, opt not to allow political ads to be sold programmatically, to avoid problems with ad acceptability and disclosures.

An optimistic note: "I personally am in favor of more transparency around targeting but think the first priority right now must be disclosing the source of political advertising," says Keegan Goudiss, a partner at Revolution Messaging, the political advertising firm that managed ad buying for the Bernie Sanders presidential campaign. "Tech companies have an opportunity to build a better version of the TV advertising political file on the FCC website."

By the numbers: Roughly $450 million was spent on Facebook during the 2016 general election and roughly $350 million on Google, according to data from Borrell Associates Inc. That number is only expected to increase as audiences migrate their attention to digital and mobile, specifically.

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